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Many BNPL providers are designed to bypass regulation because their loans often involve fewer than five payments. This means consumers lack protections against unauthorized charges, disputes, or fraudulent activity. If issues arise—like a faulty product or a billing error—resolving them can be complicated, as these plans are not obliged to follow the same consumer protection standards.
Lack of Financial Protections
Without the legal framework that governs credit cards, consumers are more exposed to fraud, billing mistakes, or even the termination of service without notice. This situation underscores the importance of treating BNPL as loans and exercising caution.